Friday 24 October 2014

Diageo denies sponsorship ban would lead to cut in Irish operations

Published 17/06/2013 | 05:00

Diageo brews Guinness at St James Gate in Dublin
Diageo brews Guinness at St James Gate in Dublin

DRINKS giant Diageo has denied a ban on drinks sponsorship could ultimately lead to a reduction in its operations here, despite a warning from its Irish chief yesterday.

Diageo, which owns Guinness and controls 40pc of the market, told a Sunday newspaper that a clampdown on sponsorship might force the company to reduce spending in future.

A spokesman for the company insisted the drinks company "wants to be able to continue with further investments in the future, but to do so requires a sustainable environment in which to promote our Irish-manufactured products responsibly".

However, a new statement this morning from Diageo said it was not threatening to withdraw from Ireland.

But Peter O'Brien, Diageo's corporate relations director for Western Europe, warned on RTE's Morning Ireland that a drink sponsorship ban would make attracting more investment difficult.

“We continue to try and win business and investment for Ireland,” he said. “It will be more difficult for us to do that in the future if we have an environment that is very, very anti-alcohol. We have to have a sustainable environment,” he said.

Diageo is currently spending €153m on new plant at the company's headquarters in Dublin's St James's Gate.

The comments came after the head of Diageo's Irish operations said yesterday that the company did not have to brew Guinness or make Baileys in Ireland.

David Smith dismissed proposals to ban alcohol companies from sponsoring sport and cultural events as "political headlines" that could lead the company to scale back spending here.

"If our Irish business is diminished by this, there is less need to invest," Mr Smith told a Sunday newspaper.

The comments were sharply criticised by communications specialist Terry Prone, who said it was "outrageous" for Diageo to suggest that the ban on drinks sponsorship was a "political headline".

"I find that frankly outrageous," she told RTE's Marian Finucane show.

"For a drinks company to suggest that this is a political issue is very clever spinning..."

Director general of the Law Society, Ken Murphy, called on the Government to insist that visiting dignitaries are not photographed with a pint of Guinness, which generates free publicity for the company.

"One political thing that could be done in relation to Diageo is the next time a head of state comes, they should not be photographed for the world's media in the greatest PR (public relations) coup ever," he said.

"Queen Elizabeth and Prince Philip at 10 in the morning had to stand and admire a pint of Guinness."

The company rejected proposals from Junior Health Minister Alex White to ban drinks sponsorship, but said it remained committed to working with the Government to "find the effective solutions to reduce alcohol misuse further".

The comments come as opposition to the drink sponsorship ban continues to mount.

Some health campaigners say a ban would help reduce underage drinking and break the link in people's minds between sport and alcohol.

Opponents say there is little evidence that a ban works, and claim that many sporting events would have to be cancelled if sponsorships were removed.

A draft report by an Oireachtas committee says the ban is not merited, and the country's main sporting organisations would suffer financially.

Diageo is one of the country's biggest advertisers and employs around 1,500 people in Ireland.

A ban on sponsorship would come at a difficult time for the company, which is struggling with falling sales in Ireland and the rest of Europe as drinking habits change, the recession bites and people become more worried about their health.

Irish Independent

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